Steel Markets
Oil & Natural Gas Rig Count Continues to Decline, Now at 2009 Levels
Written by Brett Linton
May 15, 2015
According to Baker Hughes data from May 15th, 2015, the U.S rig count for the week was 888 rigs exploring for or developing oil or natural gas. The last time the active U.S. count was this low was back on June 12, 2009 at 876 rigs.
This week’s total rig count is down 6 rigs when compared to last week, with oil rigs down 8 to 660 rigs, gas rigs up 2 to 223 rigs, and miscellaneous rigs unchanged at 5 rigs. Compared to this time last year, the 888 count is down 973 rigs, with oil rigs down by 871, gas rigs down by 103, and miscellaneous rigs up by 1.
The decline in the drilling of new gas and oil wells is having a direct impact on the amount of line pipe, storage tanks, and OCTG that is being used by the energy sector. A good portion of these products come from hot rolled coil or plate substrate, and are reasons for both the short lead times on hot rolled and plate at North American steel producers and the falling steel prices we have seen going back to mid-2014.
The situation in Canada is just as bad as the U.S. with total rigs down nearly 50 percent compared to one year ago. The Canadian rig count increased by 2 to 77 rigs this past week, with oil rigs up 5 to 21 rigs and gas rigs down 3 to 56 rigs. Compared to last year the 77 count is a decrease of 76 rigs, with oil rigs down by 41 and gas rigs down by 35. International rigs decreased by 49 to 1,202 rigs for the month of April, a decrease of 147 rigs from the same month one year ago. For a history of both the US and Canadian rig count click here.
About the Rotary Rig Count
A rotary rig is one that rotates the drill pipe from the surface to either drill a new well or sidetracking an existing one. They are drilled to explore for, develop and produce oil or natural gas. The Baker Hughes Rotary Rig count includes only those rigs that are significant consumers of oilfield services and supplies.
The Baker Hughes North American Rotary Rig Count is a weekly census of the number of drilling rigs actively exploring for or developing oil or natural gas in the United States and Canada. Rigs considered active must be on location and drilling. They are considered active from the time they break ground until the time they reach their target depth.
The Baker Hughes International Rotary Rig Count is a monthly census of active drilling rigs exploring for or developing oil or natural gas outside of the United States and Canada. International rigs considered active must be drilling at least 15 days during the month. The Baker Hughes International Rotary Rig Count does not include rigs drilling in Russia or onshore China.
Brett Linton
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